From six cars to Cosmos: How many Teslas are still behind Xu Jiadian?

On August 3, Evergrande Automobile Group held a simultaneous press conference in Shanghai and Guangzhou, releasing six pure electric cars in one breath, from Hengchi 1 to Hengchi 6, named in numbers. The six models cover all levels from A to D, including passenger car models such as sedans, SUVs, MPVs, etc. Evergrande said the vehicles will be mass produced in 2021.

Editing by Zhang Jilong.

From six cars to Cosmos: How many Teslas are still behind Xu Jiadian?

Evergrande Motor’s six pure electric cars released on site.

In the new car industry, such speed is called “god speed”.

NIO, for example, from its inception to the release of the first mass-produced ep9, which took two years between; the real mass-market ES8 was unveiled six months later; and Evergrande’s mind about the new energy giant Tesla has launched only four models in 17 years.

According to Evergrande, they have completed the whole process of “0 to 1” in the field of new energy vehicles in just two years by holding high.

The move may also be intended to counter doubts about Evergrande’s ability to build cars.

Since 2018, Evergrande has experienced a honeymoon-to-break-up with Jia Yueting-controlled FF, and the acquisition of the NEVS 93 was also considered “listed and backward” and The Evergrande 1, originally scheduled to debut in the first half of this year, was also postponed. A succession of incidents, so that Evergrande car once by the outside world questioned.

The report card was handed over, with particular feedback from the capital markets.

On the day of the new car launch (August 3), Evergrande Health (HK.00708), the main body of Evergrande’s car-making business, closed at HK$37.05, up 3.64 per cent from the previous session’s closing price, with a market capitalisation of HK$320.112 billion, or about RMB288.4 billion.

Evergrande Health’s shares have jumped 688 per cent from a low of HK$4.70 on March 23 this year.

From six cars to Cosmos: How many Teslas are still behind Xu Jiadian?

The release of the new car, let Evergrande through the first level of building a car.

But for all car makers, they have only one chance to make a licence, and the real challenge is mass production, sales and delivery.

For Evergrande, which had no previous car-making genes, these are just beginning.

The first answer.

No price, no detailed parameters, no clear listing date, Evergrande handed over the first car-making answer is surprising.

“Evergrande is a little different from traditional car companies releasing new cars.” People close to Evergrande said that from the press conference, the parameters of the six cars were not mentioned, “the six cars of the design is the biggest point of view of the event.” “

In October 2019, Evergrande signed a strategic cooperation agreement with 15 masters representing the world’s top automotive modeling standards to provide the world’s top design for the “Hengchi” full range of models.

It is reported that the six cars unveiled from the international design master Anders, Michael Robinson, Maruyama and other people’s handwriting. Among them, Anders Warming has served as the chief designer of BMW, Mini and Borgward.

This year, with Evergrande’s car-making car is about to “turn over” the day approaching, Evergrande Health’s share price can be called on the rocket.

From a low of HK$4.70 on March 23 to HK$37.05 on August 3, up 688 per cent. And in the last 30 trading days, Evergrande Health has 22 days of gains, during which the overall increase of 250.85 percent.

At present, Evergrande Health’s market value has exceeded HK$320.1 billion, or about RMB288.4 billion.

This means that Evergrande Health, which has not yet delivered a car, has surpassed Evergrande Group (HK$282.6 billion, or about 254.5 billion yuan) and BYD (241.8 billion yuan) and SAIC (213.9 billion) as the number one Chinese auto company.

But Evergrande Health still has a big gap in market capitalization compared to Tesla, which has always been a target, with its latest market capitalisation of $280 billion, nearly seven times that of Evergrande Health.

But the reasons for Evergrande’s share price rise are clearly not to be found in the company’s results. Its 2019 annual report showed that operating income for the current period was RMB5,636 million, with a loss amounting to RMB4.426 billion, a significant increase over the same period a year earlier, and a loss of RMB1,429 million for the same period in 2018.

Car-building is the real reason for Evergrande Health’s share price surge, but during the same period, the net loss of the new energy vehicle business reached 3.31 billion yuan, which also became the main reason for Evergrande Health’s loss.

Evergrande Health’s main revenue is now its health management business, which, according to its 2019 annual report, accounts for the vast majority of its turnover. Among them, health space income of 4,948 million yuan, medical beauty and health management revenue of 26.59 million yuan, and new energy vehicle revenue of 660 million yuan, mainly from the sale of lithium batteries revenue.

But that doesn’t stop the secondary market’s imagination of Evergrande’s health car business.

In August 2019, Evergrande’s new energy vehicle brand Hengchi was officially released.

In November of that year, at the Evergrande New Energy Global Strategic Partnership Summit in Guangzhou, Evergrande Group Chairman Xu Jiadian announced an ambitious goal of becoming the world’s largest and most powerful new energy vehicle group in three to five years.

Xu said Evergrande will invest 20 billion, 15 billion and 10 billion yuan in 2019, 2020 and 2021, with a total of 45 billion yuan, with 1 million vehicles in China, Sweden and countries along the Belt and Road, forming a one-year production capacity of 1 million vehicles after 2021 and a total planned production capacity of 5 million vehicles per year.

It is worth noting that in addition to the six cars unveiled, Evergrande Health has eight cars in the process of simultaneous development.

Just a week ago, on July 27, Evergrande Health announced that the company’s name would be renamed Evergrande Automotive, given that new energy vehicles had become the group’s most important business.

According to the announcement, Evergrande Has built a whole industrial chain covering power batteries, powertrains, advanced vehicle manufacturing, automotive sales and smart charging of new energy vehicles, has the world’s top core technology in all key links, and implemented a global integrated research and development model, in China, Sweden, Germany, the United Kingdom, the Netherlands, Austria, Italy, Japan, South Korea and other countries co-developed research and development.

Evergrande ‘tough’ to build a car.

Facing strong rivals such as NIO at home and Tesla abroad, can Evergrande really become the world’s largest and most powerful new energy vehicle group in three to five years?

In fact, Evergrande has experienced many setbacks in the automotive sector in the past.

It is hard to find evidence as to when Evergrande is determined to enter the automotive sector. But in late 2017, when The Times took a stake in Faraday Future, a start-up for electric vehicles owned by Jia Yueting, it was reported that Xu was Jia Yueting’s new white knight.

In March 2018, at Evergrande’s earnings conference, Xu said that starting in 2018, Evergrande will actively explore high-tech industries strategically. “In the future, Evergrande will form an industrial pattern based on people’s livelihood real estate, cultural tourism as the two wings, and the high-tech industry as the leader.”

As for what Evergrande wants to do with the high-tech industry, Xu Jiadian said is rather vague – “at present just to explore the high-tech industry, but the industry must be a big industry.” “

In hindsight, Evergrande was determined to enter the car industry.

Until June 2018, Evergrande Health announced that it would acquire 100% of The Company at a total cost of HK$6,746.7 million. This indirectly acquired a 45 per cent stake in Smart King, a joint venture between Singy and FF, making it the company’s largest shareholder.

Evergrande Health announcement shows that through the acquisition of the world’s leading new energy vehicle technology and products, the company has the opportunity to gain strong competitiveness in the high-growth new energy vehicle industry, occupy market share, and achieve business diversification.

At that time, FF had more than 1000 new energy vehicles, computer algorithms, Internet, information systems, artificial intelligence and other technical professionals, and in China and the United States filed nearly 1500 patent applications, more than 380 patents were awarded by China and the United States.

As a real estate enterprise, Evergrande in the car is a layman, how to achieve the “car dream”?

Xu Jiadian summed up in five sentences: “Buy, buy”;

According to Xu Jiadian, Evergrande’s car is a change of road overtaking, “We for the car-making people no one, to technology no technology, to experience no experience, to manufacture base no manufacturing base, nothing, can be said to be ‘one poor and two white’.” “

From six cars to Cosmos: How many Teslas are still behind Xu Jiadian?

Evergrande’s car-making strategy, pictured from the internet.

In September 2018, Evergrande became the second largest shareholder of Guanghui Group by taking a 23.865% stake and increasing its capital to 40.964%. Evergrande is looking at Guanghui Group is engaged in energy, automotive sales, logistics and real estate business, and a wide range of countries around the world.

This means that Xu Jiadian is trying to build an ecological closed loop for Evergrande’s new energy vehicles, from research and development to sales.

Even if the tie-up with FF ends up with a power-up over, that doesn’t stop Mr. Xu’s determination to make sure of energy-powered cars.

Just half a month after the break-up with FF, Evergrande announced a $930m acquisition of a 51% stake in the electric car company NEVS.

Guoneng Is the ninth electric car company in the country to qualify for electric vehicle production, having acquired the core assets and technology of Saab in Sweden in 2012.

After the acquisition, Evergrande acquired its electric vehicle manufacturing technology and research and development capabilities, and of course, more importantly, its vehicle production qualifications.

But soon after, in June 2019, Guoneng Automobile launched the National Energy 9-3EV model, which was coldonined on the market. Insiders believe that the car is very similar to the 9-3 models it produced in 2017, both on a range of flights and exteriors are lagging behind the mainstream products of the market at the time, which means that the car is behind the line.

After the lessons of investing in FF, Evergrande has also become more experienced, no longer putting eggs in one basket and not focusing on the national energy car. At the same time as acquiring Guoneng Automotive, Evergrande has also made a lot of capital moves.

On January 24, 2019, Evergrande Health became the largest shareholder with 1.059 billion yuan, with a stake of 58.07 percent, and in March of that year, Evergrande and Koenig sseghog editing 65 percent and Koonesig 35 percent, jointly developed a limited-edition super-run called Gemera.

During the same period, Evergrande Health also acquired a 70% stake in Tate Electrical and Mechanical Co., Ltd. for 500 million yuan, thus holding the Dutch company e-Traction, the world’s leading manufacturer of wheel motor and electric vehicle transmission system research and development, with six large combinations of more than 200 patented technologies.

In May 2019, Evergrande Health made another move, acquiring Protean, a British hub motor company, and in July, Evergrande entered into an agreement with Germany’s hofer to set up a subsidiary in Germany, with Evergrande Health holding a 67% stake and Germany’s hofer holding a 33% stake, with the aim of acquiring hofer’s technology and research and development manufacturing team in the power train sector.

In order to expand Evergrande’s circle of friends, in 2019 Xu jiaxuan led Evergrande auto industry executives to 23 countries and 47 cities around the world, and visited 58 leading enterprises in various fields of the global automotive industry, seeking to establish cooperative relations between these enterprises. In November 2019, Evergrande said it had signed a strategic cooperation agreement with Bosch, Magna, Continental, ZF, ThyssenKrupp, Jetegt, BASF and other top 60 automotive parts companies in the world.

From six cars to Cosmos: How many Teslas are still behind Xu Jiadian?

Xu Jiadian inspection partner, pictured from Evergrande Automobile.

In addition to acquisitions and cooperation, Evergrande is also building its own research and development system. In August 2019, Huang Xiangdong, former director of GAC Group Automotive Engineering Research Institute, and Xu Ziyi, former president of Shanghai Daxian Power Control Technology Co., Ltd., joined Evergrande as president of the Automotive Research Institute and director of the Power Research Institute, respectively.

Subsequently, Evergrande New Energy Vehicle Global Research Institute launched a global recruitment, recruitment of 8000 new energy vehicle industry world’s top experts and technical elite, recruitment positions from dean to director and general engineers.

From scratch, Evergrande bought technology and talent and successfully released its first new cars. It seems that everything is ready, only the “order” is poor.

Chance geometry?

In recent years, under the state subsidy policy, various forces of vehicle-building have poured into the new energy vehicle track.

Sky eye data show that the current state of the domestic industry, survival, migration, move out of new energy vehicles related enterprises more than 140,000. Among them, in addition to the new car-building enterprises, there is no shortage of back-to-back groups of traditional car enterprises, as well as IT, home, real estate and other cross-border players to join.

Although there are many players, but ultimately can survive in the market is very rare. Among them, the capital problem is the “number one killer” of many new energy vehicle enterprises.

According to all-weather technology incomplete statistics, in recent years exposed to the breakdown of funds, underpayment, production and other issues of the company is not in the minority. These include Sailin, Batten, Bo County, Yangtze River and so on.

For example, the second-line new car-building enterprise Saiten, set up only three years, recently due to the crisis in the capital chain, has announced the suspension of work, stop production. Previously, Batten had raised more than 8 billion yuan.

From six cars to Cosmos: How many Teslas are still behind Xu Jiadian?

In recent years into the crisis of the capital chain of the new force of car-building, all-weather scientific and technological mapping.

At the end of 2016, NIO CEO Li Bin publicly stated that no 20 billion cars should not be built.

By contrast, as the head of the real estate industry, Evergrande is ready to invest 45 billion in three years, can be described as a big deal. According to Evergrande’s financial results, Evergrande Group’s net profit in 2018 was 72.21 billion yuan.

That is, Xu Jiadian only needto come up with Evergrande’s net profit of less than a year to cover this investment. Evergrande President Xia Haixuan has also said, “To come up with 120 billion to support the development of new industries, for Evergrande, will not hurt the bones.” “

It is not hard to see that Evergrande’s biggest advantage in entering the automotive industry is that it has plenty of capital.

But in addition to the money, Evergrande, which lacks the car-making gene, has to be left to suppliers for almost all key links, from platforms to modeling to powertrains.

For example, in the design, Evergrande New Energy Vehicle Group and from Germany, Italy, the United States, France, Japan and other countries 15 well-known automotive modeling designers signed a strategic cooperation, the establishment of “Evergrande New Energy Vehicle Modeling Design Expert Committee”, all designers as experts in the Committee, for each “Hengchi” modeling program to provide design advice.

Evergrande said the move was to create a “explosion” with “perfectionism”.

But some people from the auto industry have raised doubts about it – “Are these designers really up to the top or really?” Designers of different origins have different aesthetics, if they don’t agree with whom? How does Hengchi unify the design language and standards? “

In the final analysis, these forests always always need Evergrande to clap the board. This includes how to effectively integrate supplier solutions and find the optimal combination, each of which requires professional judgment.

In a negative case, Great Wall Motor’s once-launched Haver H8 model, which aims to break through the ceiling of its own brand and hit the higher-end market, is scheduled to go on sale by the end of 2013.

In order to build the H8, Great Wall Motor has given a lot of resources to support its key components from the world’s top suppliers. However, the h8 launch process of a wave of twists and turns, such as the transmission system there is a knock tone, affecting the quality of the vehicle, many times delayed the listing. After going public in 2015, the H8 suffered poor sales and was discontinued in 2018.

And due to the collision of different industry cultures, Evergrande has recently seen some brain drain.

In April, Evergrande Power Technology Group Executive Vice President Lu Chao announced the departure of Evergrande circle, he said: “real estate car-making” model, and the automobile industry development law has many collisions, if not change the behavior, car-building concept, it is difficult to succeed.

In July, it was reported that Huang Xiangdong, director of the Automotive Research Institute of Evergrande’s Global Research Institute for New Energy Vehicles, had left his post in May this year for less than a year.

None of this is enough to influence Evergrande’s pace.

According to the plan, Hengchi full series of products will be in 2021 to achieve full mass production, the first phase of total production can reach 1 million units, 10 to 15 years of planned total production of 5 million vehicles per year.

After building a million cars, the problem of selling them still needs to be solved.

According to Bloomberg forecasts, China’s electric vehicle sales are expected to reach 3.5m units by 2023, meaning Evergrande will have a market share of more than 29%.

In fact, the track is becoming crowded. At Evergrande’s cross-border, some in the traditional automotive companies are also in the field of new energy vehicles focus.

In July alone, big groups such as BYD, Geely Automobile and Dongfeng Motor were in action in the new energy vehicle industry.

On July 12, BYD’s new energy flagship car”, Han, was officially launched, and on July 22, the polar-star brand jointly owned by Volvo Cars Group and Zhejiang Geely Holding Group officially launched the delivery of its first pure-electric high-performance coupe polar 2 (Polestar 2) in Shanghai, and on July 29, Dongfeng Motor Group Co., Ltd. launched its “Yutu” car brand strategy in Wuhan and launched its first concept car, VOYAH i-Land.

Compared with cross-border players such as Evergrande, BYD, Geely Automobile and Dongfeng Motor have been fighting in the industry, but in the field of new energy vehicles, they are not plain sailing, still like thin ice.

In the case of BYD Han, which BYD has high hopes, this car reflects the heavy burden of the transformation of traditional cars, with bundled consumption and price increases becoming the key to user criticism due to the use of the 4S store model for sales. In addition, the lack of intelligent, assisted driving technology has disappointed some users.

In addition, although traditional auto manufacturers are also strong in financial power, but in the case of new energy vehicle enterprises generally huge losses, whether they can endure long-term losses, is still a question.

“Normal car companies are generally a five-year, 10-year plan, and it’s impossible to get a quick return in 1-2 years, ” says James, a user and former employee.

Some people with experience to kill in, some people with huge sums of money to come, but the victory has not yet been divided. In any case, the addition of more participants is accelerating the new energy vehicle circuit as a whole, and the industry is becoming interesting.